QUESTION 7 Widgets are produced in factories that pollute the air, harming the factories' neighbors. Each widget produced causes $5 worth of pollution damage. The following charts show the marginal values of widgets to consumers and the marginal costs felt by producers. MARGINAL VALUE (PRIVATE) MARGINAL COST QUANTITY MV QUANTITY MC 1 1 2 2 3 $25 15 13 12 10 8 6 3 4 4 $2 5 11 12 15 20 25 5 5 6 6 7 7 Fill in each blank below with a imber, no decimals, no dollar signs. a. What is the social gain if the neighbors do not move and widgets are untaxed? b. What is the social gain if the neighbors do not move and widgets are subject to a tax of $10 per widget? (You should assume that all tax revenue is paid to someone other than the neighbors.) c. What is the social gain if widgets are untaxed and the neighbors are able to move away at a cost of zero? d. Fill in the blank: If widgets are untaxed, the neighbors will move away if the cost of moving is less than e. Fill in the blank: If there is a tax of $10 per widget, the neighbors will move away if the cost of moving is less than f. Assume that the government always imposes a tax equal to the amount of harm caused by the externality (and that if the neighbors move away, there is no harm). Fill in the blank: To maximize social gain, the neighbors should move away if the cost of moving is less than